By Mike Archer. While Black Press and the political power structure were busy assuring everyone that BC municipalities are “on much safer footing” than the City of Detroit which declared bankruptcy this week, a former advisor to the City of Winnipeg and the Government of Ontario tells a different tale.
The tale is worth listening to for Abbotsford taxpayers who may not be aware of just how much their City staff and politicians have been borrowing internally and deferring desperately needed infrastructure repairs in order to pretend our financial house is in order.
When Abbotsford taxpayers demanded an end to double digit annual tax increases they got it. And their water rates more than doubled.
What’s it going to be this time?
Abbotsford has been deferring improvements to its infrastructure for nearly two decades. Once Councillors John Smith and Bruce Beck bullied Plan A through council the huge increase in costs forced the City to further defer significant infrastructure improvements, many of which are still being deferred, such that Abbotsford’s infrastructure can simply no longer support economic growth. At the same time, Abbotsford became the only City of the Fraser Valley to have a negative balance in its Development Cost Charges (DCCs) fund and decided to put a much higher percentage of the costs of development onto the local taxpayer than any other municipality in BC.
Averting a Canadian Detroit
[excerpt] Canadian city councils can — and do — defer billions in infrastructure maintenance obligations, even as they cheerfully take on new debt for new arenas, subways or parkways.
Legally, Canadian cities are just as free to make the same mistakes. Both Montreal and Vancouver took on substantial debts due to off-budget Olympic Games guarantees. Canadian city councils often guarantee agency or third-party debts without any additional collateral . . . – Brian Kelcey* – Averting a Canadian Detroit, National Post 23/07/13
The Chamber of Commerce executive gleefully supported all of this fiscal mismanagement.As long as it could get a big hockey rink and a couple of overpasses out of the deal – who cares … right?
Next thing you know they’ll be complaining their tax bills are too high …
By borrowing from itself and deferring millions of dollars in crucial infrastructure work, the City of Abbotsford’s politicians and staff created an illusion that the 50 percent increase in property taxes and the doubling of water rates were short-term solutions to a few budgetary glitches and all would be well in the end.
The newspapers lapped it up and regurgitated it as though it were fact (it’s their job you know) and everybody went to sleep, sure that the naysayers and the wing nuts who were warning against financial disaster were wrong.Almost all of those on staff who created the fiction the newspapers regurgitated have now gone. The politicians who didn’t read their briefing papers (or possibly couldn’t understand them) and whose arms grew tired voting in unison for the financial mess we now must deal with are, for the most part still there, either still sleeping through council meetings, chasing butterflies or still trying to pretend they have a shred of credibility left.
Simon Gibson, whose beliefs on the treatment of the poor homeless drug addicts of Abbotsford have landed us in two expensive court cases and a Civil Liberties complaint, has left us to clean up his messes while he collects a bigger pay cheque in Victoria.No matter how much the chain-owned media wants to protect those who have ruined this City and no matter how quick they are to publish reassurances from the ‘authorized-knowers’ who spend our money that everything is OK . . . keep a close eye on your wallets.
One thing about deferrals and borrowing – they can’t go on forever if you don’t have phenomenal economic growth somewhere along the line to help you pay for them.
Abbotsford has posted ten years’ worth of declining housing starts, building permits, employment and investment.
Without a significant turnaround soon in the City’s economic indicators the bills are simply going to keep getting bigger and somebody is going to have to pay them.
The only one who can do that part of the job is you – the taxpayer.
To get a clear picture of where the City of Abbotsford stands financially and compare it to Brian Kelcey’s warnings see the articles below:
- Abbotsford DCCs
- DCC Repayment, Roads And Water Project Deferrals
- What’s Up With That? Water Project Deferrals – Can Someone Help Us Understand …
- The Truth About Your Next Tax Increase
- Abbotsford Economic Indicators
*Brian Kelcey is a Toronto-based public policy consultant. He previously served as budget advisor to the Mayor of Winnipeg, and as a senior political advisor in the Government of Ontario.